Correlation Between Thaicom Public and Prime Office

Can any of the company-specific risk be diversified away by investing in both Thaicom Public and Prime Office at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Thaicom Public and Prime Office into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thaicom Public and Prime Office Leasehold, you can compare the effects of market volatilities on Thaicom Public and Prime Office and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Thaicom Public with a short position of Prime Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaicom Public and Prime Office.

Diversification Opportunities for Thaicom Public and Prime Office

0.58

Correlation Coefficient

Thaicom Public  Prime Office

Very weak diversification

The 3 months correlation between Thaicom and Prime is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Thaicom Public and Prime Office Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Office Leasehold and Thaicom Public is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Thaicom Public are associated (or correlated) with Prime Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Office Leasehold has no effect on the direction of Thaicom Public i.e., Thaicom Public and Prime Office go up and down completely randomly.

Pair Corralation between Thaicom Public and Prime Office

Assuming the 90 days trading horizon Thaicom Public is expected to generate 40.95 times more return on investment than Prime Office. However, Thaicom Public is 40.95 times more volatile than Prime Office Leasehold. It trades about 0.06 of its potential returns per unit of risk. Prime Office Leasehold is currently generating about -0.04 per unit of risk. If you would invest  1,575  in Thaicom Public on October 9, 2024 and sell it today you would lose (275.00) from holding Thaicom Public or give up 17.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Thaicom Public  vs.  Prime Office Leasehold

Thaicom Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thaicom Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Thaicom Public is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Prime Office Leasehold

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Prime Office Leasehold are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent forward-looking signals, Prime Office is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Thaicom Public and Prime Office

The main advantage of trading using opposite Thaicom Public and Prime Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaicom Public position performs unexpectedly, Prime Office can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prime Office will offset losses from the drop in Prime Office's long position.

The idea behind Thaicom Public and Prime Office Leasehold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.